A Legal Analysis of the Belt and Road Initiative

Towards a New Silk Road?

Giuseppe Martinico, Xueyan WU, Giuseppe Martinico, Xueyan WU

• Publisher: Palgrave Macmillan
• Year: 2020
• Print ISBN:
  9783030459994
• eBook ISBN:
  9783030460006
• Topic: Law
• Subtopic: Comparative Law
• Index: Law

What does the Belt and Road Initiative mean for the existing multilateral organisations? What can it represent for the future of the European Union in the long run? What is the role of hard and soft law in the functioning of the Initiative? What does it represent from a legal theory perspective? This book aspires to contribute to the international debate by gathering scholars with different backgrounds (legal theorists, public international lawyers, comparative lawyers) in a way that they can offer their inputs and observations concerning the Belt and Road Initiative.

© The Author(s) 2020

G. Martinico, X. WU (eds.)A Legal Analysis of the Belt and Road Initiativehttps://doi.org/10.1007/978-3-030-46000-6_5

Begin Abstract

The Construction of the Rule of Law of OBOR Through Implementation of TFA

Yongmei Chen¹

(1)

School of International Law, Southwest University of Political Science and Law, Chongqing, China

Yongmei Chen

Email: [email protected]

Keywords

Rule of law of OBORImplementation of TFAChinaBRI countries

End Abstract

Introduction

According to the official documents of the Chinese government, the OBOR initiative advocates international cooperation, and the main content of OBOR international cooperation is the cooperation of trade and investment. On 28 March 2015, the “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road” (《推动共建丝绸之路经济带和 21 世纪海上丝绸之路的愿景与行动》, hereinafter referred to as “Vision and Actions on OBOR”) jointly issued by the National Development and Reform Commission, the Ministry of Foreign Affairs and the Ministry of Commerce clearly stated that the cooperation of investment and trade is a key content. In May 2017, Joint Communique of the Leaders Roundtable of the “Belt and Road” Forum for International Cooperation (《“一带一路”国际合作高峰论坛圆桌峰会联合公报》) jointly issued by President Xi and the heads of states of 28 countries also stated in the ‘Cooperation Objectives’, ‘We reiterate the importance of expanding economic growth, trade and investment based on a level-playing field, market rules and universally recognized international norms’. Judging from the actual progress of OBOR international cooperation, trade and investment are also top priorities (Liu and Wang 2018: 18). In the field of trade, China’s total imports and exports to the BRI countries in 2018 totalled 8365.7 billion yuan, an increase of 13.3% over the previous year. Among the total number, exports took up 4674.8 billion yuan, an increase of 7.9%; imports summed up in 3797.9 billion yuan, an increase of 20.9%.¹ In the field of investment, from January to November 2019, Chinese companies invested 12.78 billion US dollars in non-financial direct investment in 56 BRI countries, accounting for 12.9% of the total amount during the same period. The investment mainly went to Singapore, Laos, Vietnam, Indonesia, Thailand, Pakistan, United Arab Emirates (UAE), Malaysia, Cambodia and Kazakhstan. In terms of foreign contracting projects, Chinese companies have newly signed 6055 foreign contracted engineering projects in 61 BRI countries, with a new contract value of 127.67 billion US dollars, accounting for 61.2% of the total new contracted value of China’s foreign contracted projects during the same period, an increase of 41.2%; the completed turnover was 74.61 billion US dollars, accounting for 55.3% of the total during the same period, an increase of 1.3%.²

However, in addition to geographical differences, the BRI countries differ in the level of economic development. Generally speaking, the level of economic development and the degree of trade facilitation tend to show a positive correlation: the more developed a country’s economy is, the higher the per capita GDP is, and the stronger its ability to trade and invest abroad is, the more it would actively promote trade and investment facilitation cooperation. In less developed countries, the degree of marketisation is not high; the corresponding market economy system is incomplete; the laws are not sound and the transparency is low; and the degree of trade and investment facilitation is not high. All the above, status quo directly affects the volume of trade and investment in their countries. The difference in the economic development level of these countries not only determines their differences in the basis and level of trade and investment facilitation, but also causes the differences in their goals and demands in trade and investment cooperation, which leads to the lack of consistency in countries’ measures to promote trade and investment facilitation (Zhang and Fan 2016: 27).

Most of the BRI countries have major deficiencies in terms of market access, border management, infrastructure and operating environment and so on. In terms of market access, there are serious trade and investment protection problems, such as self-protective exclusion in Central Asia and the Commonwealth of Independent States (CIS) countries; border management procedures are cumbersome without standardised procedures; and port management is inefficient. In terms of infrastructure, the port facilities, information and communication facilities as well as logistics facilities are relatively backward, which affects paperless customs clearance applications and e-commerce development, and the construction of port management platform. In terms of the operating environment, the situation in many regions is volatile; it is difficult to keep policy coherence and stability. Many BRI countries have weak legal systems and lack effective legal foundations and institutional guarantees for trade and investment (Zhang and Fan 2016: 27).

If the problems such as infrastructure can be solved through investment and construction, then the biggest obstacle appearing on the implementation of OBOR initiative should be that most BRI countries have a low level but high risks of rule of law. The risks include both abstract legal and policy risks and concrete measures risks. To strengthen the rule of law communication and cooperation is an important measure to address these risks because the implementation of OBOR initiative requires the protection of the rule of law. In fact, the construction and cooperation of the rule of law are also the due meanings of the policy coordination in the “Five-Pronged Approach”³ of OBOR initiative. On this basis, the construction of the OBOR rule of law and the implementation of the OBOR initiative can be promoted smoothly.

Recognising the importance of the rule of law cooperation and international rule of law on the implementation of OBOR initiative, the Chinese Ministry of Foreign Affairs and the Chinese Law Society jointly held the first Forum on the Belt and Road Legal Cooperation in Beijing from 2 July to 3 July 2018. “Statement of the Co-Chairs of the Forum on the Belt and Road Legal Cooperation” (《“一带一路”法治合作国际论坛共同主席声明》) was issued as an important achievement of the meeting. According to the statement, on the one hand, it is necessary to carry out cooperation on the rule of law based on the principles of mutual consultation, co-construction and sharing, in order to consolidate the foundation of the rule of law for the construction of OBOR; on the other hand, the countries should observe and improve the relevant systems of international rules with the existing international cooperation mechanisms and by exploring the establishment of new mechanisms to build a stable, fair, transparent and non-discriminatory rule and institutional framework for OBOR. In order to trade with the BRI countries smoothly, it is necessary for China to pay special attention to and put extra emphasis on the reform and improvement of the legal system for the facilitation of China’s customs trade, and to timely transform and implement the international treaties and the rules regarding trade facilitation. Several studies have also shown that trade facilitation will strongly promote global economic and trade growth and it will especially benefit developing countries and SMEs⁴ (Zhou 2017: 10). To this end, China chooses to finance the implementation of OBOR rule of law cooperation training project to promote and deepen OBOR rule of law exchanges and cooperation. Therefore, the implementation of OBOR initiative will make outstanding contributions in strengthening the dialogue and coordination of laws and policies in countries along the route, and strengthening the development of the international rule ...

Table of contents

• Cover
• Front Matter
• The Belt and Road Initiative: A Legal Analysis—An Introduction
• Is the ‘Belt and Road’ Initiative the Chinese Vision of Global Governance?
• Two Conceptions of Global Order
• International Settlement of Trade and Investment Disputes Over Chinese ‘Silk Road Projects’ Inside the European Union
• The Construction of the Rule of Law of OBOR Through Implementation of TFA
• Rule of Law Gaps and the Chinese Belt and Road Initiative: Legal Certainty for International Businesses?
• Comparative Law Reflections on the Use of Soft Law in the Belt and Road Initiative
• The Importance of International Water Law to the Successful Implementation of the Belt and Road Initiative: Evidence from Central Asia
• On China’s Strategy in Belt and Road International Intellectual Property Cooperation
• China’s Political Risk Insurance for Outward FDI Within the Context of Belt and Road Initiative
• An Analysis of the Legal Issues of China’s Overseas Investment in the Context of the ‘Belt and Road’ Initiative
• Marching to an International Law Powerhouse Through Cities: An Ideational Reflection on China’s ‘Belt and Road’ Initiative
• Construction of the International Commercial Mediation Mechanism Under BRI: A Comparative Study Perspective
• Back Matter